Muhammad Yunus, The Man Who Redefined Peace

The real-life economics of a poor person's existence.

If I could be useful to another human being, even for a day, that would be a great thing. It would be greater than all the big thoughts I could have at the university.

Muhammad Yunus

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Poor people are not asking for charity. Charity is not a solution for poverty

Muhammad Yunus

what if you could harness the power of the free market to solve the problems of poverty, hunger, and inequality? Nobel Peace Prize winner Muhammad Yunus of Bangladesh is doing exactly that. As founder of Gravamen Bank, Yunus pioneered micro-credit, the innovative banking program that provides poor people with small loans that they use to launch businesses and lift their families out of poverty.

Yunus established the banking system 30 years ago to lend small amounts of money to the rural poor in Bangladesh villages. Most of the low-interest microloans go to women, who use them to start their own profit-making enterprises, mainly in agriculture, crafts, or services.

Grameen Bank now has 2,422 branches, employs more than 20,000 people, and has loaned more than $6 billion since its founding. Borrowers own most of the equity in the bank. More than 250 institutions around the world operate micro-credit programmes based on the Grameen Bank model.

“Lasting peace cannot be achieved unless large population groups find their own way to break out of poverty. Micro-credit is one such means”- says Yunus, the man behind this marvellous project, who won Nobel Peace Prize in 2006.

Muhammad Yunus was born in 1940 in Chittagong, the business centre of what was then Eastern Bengal. He was the third of 14 children of whom five died in infancy. Educated in Chittagong, he was awarded a Fulbright scholarship and received his Ph. D. from Vanderbilt University, Nashville, Tennessee. In 1972 he became head of the Economics Department at Chittagong University.

The incidents that transformed this Economics teacher into a social entrepreneur were the 1974 Bangladesh famine and his encounter with the bamboo chair seller. 

In his book, “Banker to the Poor”, Yunus recalls that in 1974 he was teaching economics at Chittagong University, when the country experienced a terrible famine in which thousands starved to death.

“We tried to ignore it,” he says. “But then skeleton-like people began showing up in the capital, Dhaka. Soon the trickle became a flood. Hungry people were everywhere. Often they sat so still that one could not be sure whether they were alive or dead. They all looked alike: men, women, children. Old people looked like children, and children looked like old people.

The thrill he had once experienced  while teaching his students elegant economic theories that could supposedly cure societal problems, soon  disappeared. As the famine worsened he began to dread his own lectures.

“Nothing in the economic theories I taught reflected the life around me. How could I go making my students believe stories in the name of economics? I needed to run away from these theories and from my textbooks and discover the real-life economics of a poor person’s existence.”

Professor Muhammad Yunus led his students on a field trip to a poor village. They interviewed a woman who made bamboo stools, and learnt that she had to borrow the equivalent of 15p to buy raw bamboo for each stool made. After repaying the middleman, sometimes at rates as high as 10% a week, she was left with a penny profit margin. Had she been able to borrow at more advantageous rates, she would have been able to amass an economic cushion and raise herself above subsistence level.

Realizing that there must be something terribly wrong with the economics he was teaching, Yunus took matters into his own hands, and from his own pocket lent the equivalent of £ 17 to 42 basket-weavers. He found that it was possible with this tiny amount not only to help them survive, but also to create the spark of personal initiative and enterprise necessary to pull themselves out of poverty.

Against the advice of banks and government, Yunus carried on giving out ‘micro-loans’, and in 1983 formed the Grameen Bank, meaning ‘village bank’ founded on principles of trust and solidarity. In Bangladesh today, Grameen has 1,084 branches, with 12,500 staff serving 2.1 million borrowers in 37,000 villages. On any working day Grameen collects an average of $1.5 million in weekly installments. Of the borrowers, 94% are women and over 98% of the loans are paid back, a recovery rate higher than any other banking system. Grameen methods are applied in projects in 58 countries, including the US, Canada, France, The Netherlands and Norway.

As Muhammad Yunus himself describes: ‘The repayments are designed in such a way that they are tiny instalments. You can pay back your loan over a long period. So all of this together is micro-credit. Small loans for income-generating activity, addressed to the poorest, without collateral.’

Muhammad Yunus is a rare  bone fie visionary. His dream is the total eradication of poverty from the world. ‘Gravamen’, he claims, ‘is a message of hope, a program me for putting homelessness and destitution in a museum so that one day our children will visit it and ask how we could have allowed such a terrible thing to go on for so long’. This work is a fundamental rethink on the economic relationship between the rich and the poor, their rights and their obligations. The World Bank recently acknowledged that ‘this business approach to the alleviation of poverty has allowed millions of individuals to work their way out of poverty with dignity’.

Credit is the last hope left to those faced with absolute poverty. That is why Muhammad Yunus believes that the right to credit should be recognized as a fundamental human right. It is this struggle and the unique and extraordinary methods he invented to combat human despair that Muhammad Yunus recounts here with humility and conviction. It is also the view of a man familiar with both Eastern and Western cultures — on the failures and potential for good of industrial countries.


Muhammad Yunus showed interest  in launching a political party in Bangladesh named Nagorik Shakti (Citizen Power) in early 2007, but later discarded the plan. Yunnan wrote an open letter, published in the Bangladeshi newspaper Daily Star, where he asked citizens for views on his plan to float a political party to establish political goodwill, proper leadership and good governance. In the letter, he called on everyone to briefly outline how he should go about the task and how they can contribute to it.

He has won a number of other awards, including the Ramon Magsaysay Award,the World Food Prize the Sydney Peace Prize, and in December 2007 the Ecuadorian Peace Prize. Additionally, Dr. Yunus has been awarded 26 honorary doctorate degrees, and 15 special awards. Bangladesh government brought out a commemorative stamp to honour his Nobel Award. In January 2008, Houston, Texas declared January 14 as “Muhammad Yunus Day”.

For his work with the Grameen Bank, Yunus was named an Ashoka: Innovators for the Public Global Academy Member in 2001.

His books include Love and Terror, Speak Sunlight (a memoir of childhood) and several children’s novels. He is a contributor to Vogue, Architectural Digest, the Wall Street Journal, the International Herald Tribune and other periodicals.

I only wish every nation shared Dr Yunus’ and the Grameen Bank’s appreciation of the vital role that girls and women play in the economic, social and political life of our societies.

US First Lady Hillary Clinton  

By giving poor people the power to help themselves, Dr Yunus has offered them something far more valuable than a plate of food. He has offered them security in its most fundamental form.

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